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Risks Involved in Buying a Hybrid Car

Essay by   •  June 13, 2012  •  Essay  •  1,247 Words (5 Pages)  •  1,637 Views

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Introduction

Recently, my wife and I went through the experience of buying a new car. For anyone who's been through this experience before, they could relate to the anxiety it may cause. It could be a very stressful occurrence in which most people would avoid. But if you are prepared when walking into the dealership, it could leave you feeling good about the whole experience.

Before we ever walked into the dealership there were several things/risks we had to consider. First, we looked at the rising price of gas. Because my wife travels a good distance to and from work this was very important to us. With the summer months rapidly approaching and no relief in sight at the gas pumps, fuel economy was our number 1 concern.

Secondly, the total cost of the vehicle. We had set a budget for ourselves and knew we couldn't go over it. We took into account the cost of buying a used car vs. the cost of buying a new car. Here we looked at the asking price of the cars, the maintenance cost of the cars and the overall cost of owning the cars.

Finally, we considered traditional gas engines vs. a hybrid engine. We knew that the hybrid would give us the MPGs that we needed in a car but had concerns about the safety of it. There have been reports that hybrid cars, when in an accident, could electrocute the EMTs that were trying to help the car occupants. This was due to the electricity that the battery that powers the car produced.

Risks Involved

Chicago and its surrounding suburbs pay the highest price for gas nationally. According to gasbuddy.com, Chicagoans pay $4.50 on average for a gallon of regular gas. This is about $.65 higher than the national average and about $.25 higher than the second highest paying city Los Angeles. (http://www.nbcchicago.com/traffic/transit/Chicago-Gas-Most-Expensive-in-Nation-143953466.html)

Over the last several years, history has shown us that during the summer month's gas prices tend to raise even higher. The oil companies even have a special blend of gas for these months (which due the unseasonal warm weather, most gas stations are already selling this blend) known as the "Summer Blend". Experts are predicting that fuel prices for this summer could go as high as $7 per gallon. If this predication is true, this would mean it would cost my wife over a $100 each time she goes to full up her car with gas.

The second risk we had to take into account was the cost of buying a used car vs. a new car. We want the buy the best car for our money but not at the cost of high maintenance fee. We've bought both new and used cars in the past and had good and bad experiences with both of them. One day we sat down and calculated the cost of ownership of each type.

We knew that the upfront cost of buying a new car would be greater. We would have to put more money down as a down payment in order to keep our monthly payments within our budget. Also, the taxes that we pay on a new car would be higher because of the higher sticker price. And finally, the depreciation of the car as soon as we drive it off the lot.

Although there are reports about the history of a used car, such as CarFax, to help ease the fears of buying a used car, there are still risks. According to an article posted in the New York Daily News, the annual cost of up keeping a used car running could reach in the thousands. (http://articles.nydailynews.com/2012-03-13/news/31161695_1_kelley-blue-book-fuel-costs-new-cars). Items

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